An Overview of 2015 Los Angeles Tech Fund Raises
Happy New Year! Part of planning for a strong new year involves taking a look back at the previous year’s work, something I did over the holiday break (well, in between bingeing on Mr Robot, Making a Murderer, The Big Short, multiple viewings of Star Wars, that is…).
[Added 1/5/16: for an overview of LA’s Tech Space, view our presentation at Slideshare]
And even though the official numbers aren’t in yet (I leave that to real bean counters while I focus on my marketing & consulting business), back of the napkin math reveals that 2015 was another strong year for fund raising among Los Angeles tech firms — $4.123 billion in raises, up from $3 billion in 2014.
Here’s a quick breakdown of how things looked — this data was pulled from headlines we accumulated at our site LA Tech Digest, matched up against info posted on Built in LA, and double-checked against numbers listed on Crunchbase.
A number of smaller / undisclosed raises were omitted for the sake of simplicity, and a handful of larger deals went down without publicly disclosing the size of the deal — so the actual numbers are higher, but this a quick means of noting where we are and where we’re going.
Once the dust settles and the real numbers come out, 2015's total Exits of $2.187 billion, a number not included in the Raises sum, is down from the nearly $6 billion in 2014 (which included Conversant ($2.1B), Internet Brands ($1.1B), Maker ($500M), AdColony ($350M), True[x] ($200M)) — but in the meantime, LA has built healthy businesses which will likely IPO in 2016 / 2017 (Snapchat, SpaceX, Honest, Dollar Shave Club).
2015 Exits include LinkedIn’s acquisition of Lynda for $1.5 billion in April, just months after Lynda raised a $186 million Series B. Tinder parent co. Match raised $460 million in its November IPO, and Santa Barbara-based Appfolio raised $74 million in its June IPO.
Collective Digital Studios ($83M, Germany’s ProSieben) and Riot Games (undisclosed, China’s TenCent) were both bought out by their international partners, and Shift was purchased by brand networks for $50 million.
Mobile Roadie (Intellectsoft), ParkMe (Inrix), Alpha Draft (FanDuel), and DivShot (Google) were all acquired for undisclosed sums, as was Hello Giggles, which was bought by Time Inc for a rumored $20 million.
This info is not included in the overall raise numbers, but shows a healthy influx of capital ready to be deployed by local VCs: University of California system (not LA-based, but UCLA weighs heavy in the system) announced its own $250 million fund late in the year; Greycroft raised $200 million for Fund IV; Mucker raised $50 million; Arena VC closed their first fund with $37 million; Science $20 million; and TenOneTen $18 million.
Wavemaker announced an undisclosed investment from noted VC Tim Draper, Cornerstone on Demand announced their Innovation Fund, and Crowdfunder and Start Engine are fully operational now that legislation has passed in order to open Equity Crowdfunding to the masses.
THE BIGGEST RAISES
The area’s biggest funding rounds include SpaceX, whose $1 billion Series E is easily justifiable given its $7 billion in future shipping contracts (and proof that the Falcon 9 could launch & land safely).
Snapchat raised a combined $538M across two Series E’s — who, despite being marked down from $20B to $16B, continues to be the social network / expression platform of choice among younger generations. Now it’s time to turn those users into dollars and deliver a more agency-friendly ad product.
Social Gaming Network (SGN, run by former MySpace head Chris DeWolfe) received $130 million from Korean investors Netmarble.
Honest Company’s $100M Series D portends a robust IPO for 2016, depending on how the public markets shake out.
Dollar Shave Club’s $90.7M Series D allows the company to continue to grow into more grooming lines, even as they face litigation from Gillette — a dismissable pain in the ass, but a sign of real success since the four year old DSC has taken a serious bite out of Gillette’s business.
Also of note were the number of companies receiving strategic investments from larger companies: Digitour (Viacom, $10M), WEVR (HTC, $10M), Jukin Media (Samsung, $2M), and TV4 (Sky TV, undisclosed).
And even though not technically LA-based (and therefore not included in the overall numbers), both Vice and Buzzfeed’s $200M+ raises will continue to fuel LA’s role as a content machine.
2015 RAISES by Levels
The funding levels break down as follows, which reflects LA’s continuing trend of lots of early-stage investment, with a handful of companies tapping into later-stage funding:
SEED / ANGEL: 48 raises for $112 million
SERIES A: 50 raises for $515.65 million
SERIES B: 21 raises for $579.15 million
SERIES C: 5 raises for $141 million
SERIES D: 5 raises for $344.7 million
SERIES E: 4 raises for $1.562 billion (most notably SpaceX’s $1B)
OTHER (Venture, Debt Financing, Convertible Notes, etc.): 39 for $869 million
2015 LA TECH CO FUNDING ROUNDS
SEED / ANGELS ROUNDS (sorted by size, numbers in millions)
Crew 32 5
Conversion Logic 4
Campus Steps 3
FEM Inc 3
Little Labs 3
Virtual Reality Company 2.1
Reload Studios 2
Local ID 1.9
Brilliant Bicycle 1.5
Rayton Solar 1
Camino Financial 0.75
SERIES A (sorted by size, numbers in millions)
Thrive Market 33
Patch of Land 23.6
Service Titan 18
Managed by Q 15
Two Bit Circus 6.5
Science 37 6.5
New Matter 6.5
Laurel & Wolf 4.4
Reload Studios 4
Stanson Health 3
SERIES B (sorted by size, numbers in millions)
Hyperloop Technologies 26
The Black Tux 25
Laurel & Wolf 20
MD Insider 12
Who What Wear 8
SERIES C (sorted by size, numbers in millions)
Nasty Gal 16
SERIES D (sorted by size, numbers in millions)
Chrome River 100
Dollar Shave Club 90.7
SERIES E (sorted by size, numbers in millions)
Snapchat 338 (June)
Snapchat 200 (February)
OTHER (Venture, Debt Financing, Bond Sales, Convertible Notes, etc. — numbers in millions)
Zest Finance 150
Access Integrated 50
3PL Central 17.5
Text Plus 7
Vision Fleet 5
VC Mobile Ent 4.5
Unitas Global 1.6
EXITS (numbers in millions)
Collective Digital Studios 83
Hello Giggles 20 (estimated)
Riot Games (undisclosed)
Mobile Roadie (undisclosed)
Alpha Draft (undisclosed)
Overall funding of LA startups hit $4 billion in 2015 — up a solid 33% from 2014's $3 billion.
2015 Exits were down significantly from 2014 ($2.1B v $6B ($8B if you include Facebook’s 2014 acquisition of Oculus, which at the time was based in Irvine /Orange County)), but a handful of honest-to-God, revenue-generating companies could go public in 2016 / 2017 (Snapchat, Honest, Dollar Shave Club, SpaceX).
LA is still an early-stage investing kind of town, but a larger influx of capital will allow local VCs to put more money into viable businesses.
And because the relative size of LA’s available capital over the years, VCs will continue to be a lot more cautious in where / how much they invest, compared to their neighbors to the north.
LA is not immune to macro economic issues, but current funding levels show that no one is going to be impaled by falling unicorns — however, Snapchat must (and will) figure out how to match agency-friendly ad programs to their massive, growing user base.
So there you have it — here’s to a healthy & happy 2016.
Did we miss anything? Feel free to leave notes in the comments section thank you.